Current Asset Allocation – 31 October 2014

Portfolio theory suggests that investors should spead their investment risks over different classes of assets that are not correlated in a similar fashion. A loss in one asset class can be mitigated by gain in another asset class.

My asset allocation as at end of last month was:

Asset Class Percentage
Cash 14.5
Structured deposits with banks 8.2
Preference shares of local banks 22.7
Retail bonds traded on Singapore Exchange 3.3
Unit trusts – equity and bonds funds 16.8
Currency investments 12.2
Singapore equity 11.9
Insurance plans 10.4

On an overall basis, the market value of total portfolio was 0.95% below costs. But on an individual asset class basis, some asset class was 9% below while others were in positive territory. The spread into different asset classes helped to cushion the negative impact of some investments.

As one gets into retirement, it might be better to consider increasing investment into fixed income instruments to get a constant stream of income. Some preference shares of local banks offer returns that are about 3% to 4% (depending on investment cost when one first bought into the preference shares). Assessing risk of preference shares collapsing is necessary before one puts money into them.

Copyright © 2014, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

This entry was posted in Financial Management, Retirement Planning. Bookmark the permalink.

2 Responses to Current Asset Allocation – 31 October 2014

  1. Mich says:

    The “Preference shares of local banks” sound interesting.

    Is it possible to have a simple post of what it is about and how can one purchase and maintain them?


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